Print Page  Close Window

SEC Filings

S-1/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 09/28/1999
Entire Document
 
<PAGE>   190
 
   
commences for that cable system and, following this initial term, the network
services agreement automatically renews itself on a year-to-year basis.
Additionally, we can terminate our exclusivity rights, on a system-by-system
basis, if High Speed Access fails to meet performance benchmarks or otherwise
breaches the agreements including their commitment to provide content designated
by Vulcan Ventures. The programming content agreement is effective until
terminated for any breach and will automatically terminate upon the expiration
of the systems access and investment agreement. During the term of the
agreements, High Speed Access has agreed not to deploy WorldGate, Web TV,
digital television or related products in the market areas of any committed
system or in any area in which we operate a cable system. All of Charter
Investment, Inc.'s operations take place at the subsidiary level and it is
through Charter Investment, Inc. that we derive our rights and obligations with
respect to High Speed Access. Under the terms of the network services agreement,
we split revenue with High Speed Access based on set percentages of gross
revenues in each category of service. The programming content agreement provides
each of Vulcan Ventures and High Speed Access with a license to use certain
content and materials of the other on a non-exclusive, royalty-free basis.
Operations began in the first quarter of 1999. Net receipts from High Speed
Access for the six months ended June 30, 1999 were approximately $24,000.
    
 
     Concurrently with entering into these agreements, High Speed Access issued
8 million shares of Series B convertible preferred stock to Vulcan Ventures at a
purchase price of $2.50 per share. Vulcan Ventures also subscribed to purchase
2.5 million shares of Series C convertible preferred stock, at a purchase price
of $5.00 per share on or before November 25, 2000, and received an option to
purchase an additional 2.5 million shares of Series C convertible preferred
stock at a purchase price of $5.00 per share. In April 1999, Vulcan Ventures
purchased the entire 5 million shares of Series C convertible preferred stock
for $25 million in cash. The shares of Series B and Series C convertible
preferred stock issued to Vulcan Ventures automatically converted at a price of
$3.23 per share into 20.15 million shares of common stock upon completion of
High Speed Access' initial public offering in June 1999.
 
   
     Additionally, High Speed Access granted Vulcan Ventures warrants to
purchase up to 5 million shares of common stock at a purchase price of $5.00 per
share. These warrants were converted to warrants to purchase up to 7,739,938
shares of common stock at a purchase price of $3.23 per share upon completion of
High Speed Access' initial public offering. Vulcan Ventures subsequently
assigned the warrants to Charter Investment, Inc. The warrants are exercisable
at the rate of 1.55 shares of common stock for each home passed in excess of
750,000, 3.9 million warrants may be earned on or before July 31, 2001 and must
be exercised on or before July 31, 2002. 3.9 million warrants may be earned on
or before July 31, 2003 and must be exercised on or before July 31, 2004. The
warrants may be forfeited in certain circumstances, generally if the number of
homes passed in a committed system is reduced.
    
 
                                       187